British energy in red in first results post restructure

16 February 2005

UK nuclear generation giant British Energy has reported pre-tax losses of £87 million (€ 126 million) in the first set of quarterly results since its government-backed £1.3 billion (€ 1.88 billion) debt restructuring staved off bankruptcy.

Forward-selling of contracts has seen the company miss out on rising power prices, although half its output for the coming financial year has been sold at £25/MWh (€ 36/MWh), above the current market price and well above the £20.8/MWh (€ 30/MWh) prices for the third quarter. Operating costs were £21.5/MWh (€ 31/MWh) for the third quarter

Working capital movements pushed losses for the first nine months of the year to £349 million (€ 506 million) from £81 million (€ 117 million) a year earlier and the company does not expect to declare a dividend for shareholders until at least the financial year to March 2007. Underlying earnings from continuing activities were £11 million (€ 16 million), down from £26 million (€ 38 million) a year earlier.

Average output over the next three years is likely to be in the region of 61.8 TWh , with analysts expecting an annual figure in the region of 68 TWh by 2008. Mike Alexander, chief executive, said the group planned to recruit more workers to help improve maintenance at its nine power stations.

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